Successful iPad debut expected to propel Apple stock past $300
Mark Moskowitz with J.P. Morgan Research issued a note to investors Monday, lifting his December 2010 price target for AAPL stock to $305, up from $240. The strength for Apple is strong sales of the Mac and iPhone, but with a successful launch of the iPad and the product carrying an estimated 51 percent gross margin, he expects the new product to contribute significantly to Apple's bottom line.
"Currently, we estimate the iPad to exhibit a slightly lower unit sales trajectory compared to that of the first generation iPhone, but we acknowledge this gap could change as iPad volumes are reported in coming quarters," Moskowitz wrote. "We expect the iPad to benefit from Apple's content ecosystem and the favorable user experiences of the iPhone and iPod touch."
J.P. Morgan has forecast 4.805 million shipments of the iPad in the first 12 months, compared with 5.047 million for the iPhone. In the June quarter alone, the iPad is projected to ship 825,000 units, followed by 1.23 million in the September quarter.
The iPad will contribute to Apple's core businesses, in the Mac and iPhone, which Moskowitz expects to grow even further in 2010. He has raised his estimates for Mac sales in the March quarter to 3.179 million, and iPhone sales to 7.348 million.
Analyst Gene Munster issued the results of a survey of 448 iPad buyers to give a better understanding of the product's early user base. The survey found:
- Just like with the original iPhone, 74 percent of iPad buyers on launch day were Mac users.
- Another 66 percent own an iPhone, and 99 percent of those plan to use their iPhone alongside their new iPad.
- Just 13 percent of those surveyed had an Amazon Kindle, and more than half of those said they would replace their Kindle with an iPad.
- Early buyers were sold on the iPad from the start, with 78 percent saying they did not consider any other gadgets when purchasing an iPad. Just 10 percent considered a kindle, and 6 percent eyed a netbook.
Munster said the survey suggests that Apple has successfully carved out a new product category, as it would appear that the iPad does not have a significant impact on iPhone and Mac sales. The analyst raised his price target for AAPL stock to $289, from $280.
Over thew weekend, Piper Jaffray's poll of 20 Apple stores found that most still had the iPad in stock, suggesting a strong supply for launch. Munster has predicted Apple sold between 600,000 and 700,000 in the first 24 hours.
Needham & Company
Analyst Charlie Wolf expects Apple to top 300,000 units sold in the iPad's first weekend, and the number could reach as high as 500,000 depending on the initial production run. The frenzy whipped up on Saturday across the country is evidence of Apple's presence in the U.S.
"The iPad launch says less about the ultimate success of the iPad and more about the prominence of Apple in our culture," Wolf wrote. "But the iPad itself is stunning. Once again, Apple has redefined a category called the tablet. The iPad is a device nobody needs but most everybody wants based on the continuing long lines at the Fifth Avenue Store and the "wow" reactions of customers on their first encounter with the device."
From here on out, though, the burden falls on software developers and content creators to turn the iPad, like the iPhone, into a "cultural phenomenon."
Brian Marshall said spot checks over the weekend found that a couple of stores in San Francisco and Boston were completely out or had very little supply of the 16GB and 32GB iPad models. But the analyst said the 64GB model was still plentiful at all locations, suggesting supply was not an issue for most customers over the weekend.
He also noted that many Best Buy and Apple stores were closed on Sunday due to the Easter holiday, potentially limiting sales.
Marshall has predicted that Apple sold 525,000 units over the launch weekend, with 250,000 online preorders, 221,000 Apple retail store sales, and 55,000 sold from Best Buy.